Income Taxes (Tables)

12 Months Ended

Dec. 02, 2022

Income Tax Disclosure [Abstract]

Income before income taxes, domestic and foreign

Income before income taxes for fiscal 2022, 2021 and 2020 consisted of the following:

(in millions)	2022		2021		2020
Domestic	$	1,958	$	1,736	$	1,090
Foreign	4,050		3,969		3,086
Income before income taxes	$	6,008	$	5,705	$	4,176

Provision for (benefit from) income taxes, current and deferred

The provision for (benefit from) income taxes for fiscal 2022, 2021 and 2020 consisted of the following:

(in millions)	2022		2021		2020
Current:
United States federal	$	465	$	391	$	119
Foreign	329		197		222
State and local	132		103		79
Total current	926		691		420
Deferred:
United States federal	(45)		(148)		(123)
Foreign	360		359		(1,313)
State and local	11		(19)		(68)
Total deferred	326		192		(1,504)
Provision for (benefit from) income taxes	$	1,252	$	883	$	(1,084)

Reconciliation of provision for income taxes

Total income tax expense differed from the income tax expense computed at the U.S. federal statutory rate of 21% as a result of the following:

(in millions)	2022		2021		2020
Tax expense computed at U.S. federal statutory rate	$	1,262	$	1,198	$	877
Tax credits	(116)		(149)		(101)
Tax settlements	(14)		(58)		(23)
Effects of non-U.S. operations	(7)		(23)		(337)
State tax expense, net of federal benefit	113		66		10
Other	14		6		4
Stock-based compensation	—		(157)		(154)
Impacts of intra-entity IP transfers	—		—		(1,360)
Provision for (benefit from) income taxes	$	1,252	$	883	$	(1,084)

Deferred tax assets and liabilities

The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 2, 2022 and December 3, 2021 were as follows:

(in millions)	2022		2021
Deferred tax assets:
Intangible assets	$	653	$	997
Capitalized expenses	298		355
Credit carryforwards	333		287
Operating lease liabilities	104		122
Net operating loss carryforwards of acquired companies	88		131
Stock-based compensation	108		91
Reserves and accruals	98		89
Benefits relating to tax positions	56		39
Other	41		34
Total gross deferred tax assets	1,779		2,145
Valuation allowance	(402)		(335)
Total deferred tax assets	1,377		1,810
Deferred tax liabilities:
Acquired intangible assets	354		447
Operating lease right-of-use assets	97		111
Prepaid expenses	110		123
Depreciation and amortization	67		49
Total deferred tax liabilities	628		730
Net deferred tax assets	$	749	$	1,080

Gross amount of unrecognized tax benefits

During fiscal 2022 and 2021, the aggregate changes in our total gross amount of unrecognized tax benefits were as follows:

(in millions)	2022		2021
Beginning balance	$	289	$	201
Gross increases in unrecognized tax benefits – prior year tax positions	20		30
Gross decreases in unrecognized tax benefits – prior year tax positions	(18)		—
Gross increases in unrecognized tax benefits – current year tax positions	53		86
Lapse of statute of limitations	(4)		(21)
Tax settlements	(18)		(4)
Foreign exchange gains and losses	(1)		(3)
Ending balance	$	321	$	289